Why Japan’s economy remains a warning to others

For most of this century it has looked as if the world’s economy was turning Japanese, with low growth, below-target inflation and rock-bottom interest rates. Today the question is how much Japan will come to look like the rest of the world. On March 19th the Bank of Japan raised interest rates for the first time since 2007, after inflation seemed at last to have become entrenched. The interest-rate target for overnight loans, previously between minus 0.1% and 0%, will rise by a tenth of a percentage point. The central bank also scrapped its policy of yield-curve control, which capped long-term bond yields at 1%. Having kept monetary policy ultra-loose for years, Japan has now begun to follow the course set by other economies since widespread inflation took hold.